Table of Contents
Introduction
The real estate industry has always attracted people with the promise of significant profits, making it a magnet for ambitious individuals seeking financial success and working freedom. Among the multitude of roles in real estate, becoming a real estate agent stands out as the most popular, yet accessible option.
As a real estate agent’s income is based solely on the commissions received from property purchases and leases, and only after the successful completion of these transactions, the most common question automatically arises: “How much money does a real estate agent make”?
In this in-depth analysis, we will not only explore the factors that influence the income of real estate agents, but also provide real-life examples of real estate agents who show profits ranging from €12,500 to well over €100,000. In which income range someone will eventually find himself/herself depends on several factors, but all of them are directly related to the individual himself/herself and how strong his/her will is to achieve his/her goals. Of course, we should not omit the fact that a huge role is also played by the professional environment in which he/she will find himself/herself and the office or company with which he/she will work with.
Commission-based income: The foundation of profits
As mentioned above, a real estate agent’s income depends solely on the commissions earned from property sales or rentals. Unlike the salaried occupations, your earnings are directly linked to your performance. Typically, real estate agents receive a percentage of the property’s sale price as a commission. This percentage can vary, but generally ranges between 2% and 6% of the value of the property if it is for sale, and 1 to 2 rental fees if it is for rent. How productive in commissions and how efficient in closing deals an agent is should not depend on quantity, but on quality.
And what exactly does that mean? It means that more productive is a real estate agent who “works” with a 4% commission than another who “works” with 2% or less, as even assuming they do exactly the same number of transactions on properties of equal value, the former will earn twice as much as the latter. Now imagine how big a difference it is to earn 15,000 €/year and 30,000 €/year!
The efficiency now, has more to do with “closing” deals. And when we refer to deals we mean not only the sales that have taken place, but also property assignments for sale or lease. And this is where most people fall into the trap of quantity and ignore quality. That is, a real estate agent who takes 10 assignments and 8 end up in a deal – closing – is more efficient than someone who takes 50 assignments (usually not exclusive) and 10 end up in a closing. In the first case the agent works less and gets paid more, while in the second case, he works more and gets paid less per day/week/month/year.
Local market dynamics: geographical influence on income
The geographic location in which a real estate agent operates, plays a critical role in determining their income potential. Thriving markets – areas characterized by high demand, which usually leads to higher property prices, also lead to higher revenues. Conversely, areas with lower demand and lower prices may offer modest or no commissions.
And here we must point out the following that most candidates, and active real estate agents, fail to understand : You will not have higher profits if you operate in many areas and you should not “run” where you think there may be some chance of a deal. The real estate profession is local and not “where the wind blows”. If you need e.g. 7 sales to reach your income goals, it is not productive and efficient to operate in 7 different areas, which may be many miles apart.
Instead, try to make 4 sales in your main location and 3 in neighbouring areas within a maximum driving distance of 10 – 20 minutes. This tactic, through the reputation you will gain in the local market, will make you sought after in your area and new ” businesses ” will keep coming in for you.
Experience and expertise: on the path to higher profits
The path to higher profits as a real estate agent necessarily involves gaining experience and refining your skills and expertise in the field. New real estate agents obviously earn less than their experienced colleagues. But as they gain experience and build a strong client base, they can win more and more lucrative deals, allowing them to enjoy higher commissions as well.
Keeping up with industry trends and constantly improving their knowledge through specialized agent training programs can skyrocket a real estate agent’s earning potential. Thus, the answer to the most common question, “How much money does a real estate agent make”? could be that you’ll earn more as you learn and grow.
Commissions and Royalties: Cooperative compensation
Leading real estate agents typically work with a brokerage, such as YOUR HOME SOLD™, which provides them with crucial support, training, resources, technology, and a platform for their business operations. However, it is important to note that the firms receive a portion of the commission as a fee for these services. The rest of the commission is the real estate agent’s income.
The commission split between the Real Estate Agent and the brokerage can vary significantly from firm to firm, emphasizing the importance of choosing a firm with a fair and competitive commission split. Commissions at YOUR HOME SOLD™ start at 50% and can go up to 90%, depending on the experience and partnership program each Real Estate Agent chooses.
Also, depending on the commission program chosen, the agent may also have a fixed monthly payment to the company for the value added services it provides (monthly services and management fee). In our company this amount starts from 50 € / month and under certain circumstances it is returned in full to the partner as over commission / bonus.
In general, however, it is worth bearing in mind the following:
- You get what you pay for.
- When a product is “free” then you are the product.
- “Free” business has never been done by anyone.
Clientele and networking: building connections for high income
The size and quality of a real estate agent’s clientele have a significant impact on their income. Agents with extensive networks of contacts and a history of successful transactions are guaranteed to attract high-value clients. Effective networking, strategic marketing and building a strong local reputation are key strategies for agents who truly want to maximize their profits.
It is no coincidence that the world’s leading real estate agents invest a significant percentage of their profits to expand their network and stay in constant contact with their existing clientele. The sooner you realize this, the better your results will be. It’s amazing, and for many people unbelievable, how at some point your customer base will grow geometrically and you will have actually created a “machine” for generating new commissions. As long as you are consistent and always connected with every contact.
Finally, how much money does a real estate agent make?
So, it’s time to reveal the “How much money does a real estate agent make”. The numbers you will see below are absolutely true and refer to today’s Greek reality, as there are people among us who earn this money, from the bare minimum, to as high as anyone can and wants to go, as there is no upper limit, unlike a salaried job. Check out with us the examples that show the wide range of earnings in the freelance real estate agent profession.
Examples of real life earnings
Beginner agent (0-2 years)
Annual earnings: 12.500 €
Number of sales/year: 5
Average commission per sale: €2,500
Agent with 2-3 years of experience
Annual earnings: 28.000 €
Number of sales / year: 8
Average commission per sale: 3.500 €
Experienced agent (5+ years of experience)
Annual earnings: 60,000 €
Number of sales / year: 12
Average commission per sale: 5,000 €
TOP Agents
Annual earnings: 120.000+ €
Number of sales / year: 20+
Average commission per sale: 6,000+ €
Conclusion
An agent’s income is affected by a number of factors, including the dynamics of the area of operation, experience, commission rates, client base, market trends, exposure and overhead. The real-life examples provided here demonstrate a wide range of earnings, starting at €12,500 for a starting agent with minimal experience and rising to over €100,000 for experienced ones, highlighting the unlimited potential for financial success in the industry.
The above factors do not include another important and crucial factor for success, which is none other than the time available for the growth of your business. As we have written in our article on dealing with Real Estate on a Full Time basis, your income will be proportional to the amount of time you invest in your “business”. Especially, and as many people want and choose to pursue the business as a second job and for a small financial supplement, since they are employed full time as employees somewhere else, they often find it significantly difficult to make even one sale and thus essentially fail. So what you need to know is that the Real Estate Agent/Real Estate Agent profession is essentially a full-time business and not a part-time job, unless one already has significant experience, a wide network and enough money to invest in promotion and marketing campaigns.
Therefore, to succeed as a real estate agent requires dedication, networking skills, adaptability to market conditions and continuous training. As you gain experience and build your reputation, your earning potential can continue to grow, making real estate an attractive career choice for those seeking significant financial rewards and independence in the ever-evolving and exciting world of real estate sales.
You can learn more about your Real Estate Career, some of the secrets of the real estate agent profession and industry, as well as explore our articles about real estate professionals, our video blog and our Real Estate Agent FAQs by following the respective links.
If you too would like to join the most ambitious and professional team of Real Estate Agents in Athens and grow professionally, fill in your details here and we will contact you shortly.
